Group 4's Danes to swoop on Securicor

THE controversial Danish security and prisoner-escort firm Group 4 Falck
is in advanced talks to acquire its smaller British rival Securicor. The merged
group would create a global firm with sales approaching £4.5 billion
and a market value of more than £1.6 billion.

Nick Buckles, chief executive of Securicor, has been in negotiations with
Lars Norby Johansen, his counterpart at Group 4, for the past eight weeks.
The two sides are hoping to thrash out an agreed deal and it is likely a stock-exchange
announcement confirming the talks will be made tomorrow.

Securicors non-executives, including its chairman Lord Sharman and
Lord Condon, a former commissioner of the Metropolitan Police, are being kept
informed.

Securicor is capitalised at £600m and has sales of £1.5 billion,
but a bid premium could increase this price by at least £100m. In the
past three years the group has had a turbulent ride on the stock market and
its prospects were hit when its American subsidiary Argenbright Security was
sued. This division was responsible for security screening for two of the
flights involved in the September 11 terrorist attacks

Buckles has since reassured the City that Securicor has more than £1
billion of insurance cover in place. It is thought that as part of the deal
with Group 4, this exposure has been ring-fenced.

However, Securicor has also had difficulties with its German operation and
this has hit the groups financial performance. In recent weeks Securicors
share price has started to recover and analysts at Citigroup have put a target
on the shares of 120p. This compares with Fridays closing price of 112p.

For some time Buckles has told investors he has been looking for a transformational
deal. To help achieve this he has sold non-core subsidiaries, such as the
remaining 50% stake in its parcel-delivery business to Deutsche Post for £167m.
As a result, the company returned £75m to shareholders. Last week Buckles
ducked out of further controversy when he ended the groups contract
to guard Huntingdon Life Sciences, the animal-testing business.

Group 4, based in Copenhagen, is the worlds second-largest security
firm with operations in 85 countries. But it has had mixed success in Britain.
Group 4 became a household name when it set up a prisoner-escort service 11
years ago and became a laughing stock after seven prisoners escaped in the
first three weeks.

If Securicor is bought, another British security company will have been taken
over by a foreign group. Last year United Technologies bought Chubb. Securicor
was founded almost 80 years ago by Edward Shortt, a former Liberal cabinet
minister. It started with four bicycle-riding guards in old police uniforms.

The groups activities now include transporting prisoners and cash.
Like Group 4, it has spotted big opportunities in the business of running
prisons and the electronic tagging of prisoners. Securicor already owns and
runs Parc prison at Bridgend, Wales, and analysts say there are some 15 foreign
governments looking at the British system of electronic tagging.

A Securicor spokeswoman refused to comment on the talks, but it is thought
Buckles has secured a board post in the enlarged group.

GROUP 4

Group 4 employs 230,000 people worldwide

It operates in 85 countries

Annual sales of the Copenhagen-based group are worth £2.9 billion

Its biggest shareholder is Jorgen-Philip Sorensen, the founder, who owns
a 22% stake. Sorensen was sent to Britain by his father in the 1960s to
extend the family security empire. He set up Group 4 in Worcestershire

In 2000 it merged with Falck

SECURICOR

Securicor employs 100,000 people, of whom 20,000 work in Britain

It operates in 50 countries

Sales are worth £1.3 billion

The company handles £1.2 billion of cash every day, collecting it
from shops, delivering to companies to pay wages, and supplying banks to
stock cash machines

On average a Securicor guard somewhere in the world is attacked every
day